Genome editing, i.e. the ability to mutagenize, insert, delete and replace sequences, in living cells is a powerful and highly desirable method that could potentially revolutionize plant basic research and applied biotechnology. Indeed, various research groups from academia and industry are in a race to devise methods and develop tools that will enable not only site-specific mutagenesis but also controlled foreign DNA integration and replacement of native and transgene sequences by foreign DNA, in living plant cells. In recent years, much of the progress seen in gene targeting in plant cells has been attributed to the development of zinc finger nucleases and other novel restriction enzymes for use as molecular DNA scissors. The induction of double-strand breaks at specific genomic locations by zinc finger nucleases and other novel restriction enzymes results in a wide variety of genetic changes, which range from gene addition to the replacement, deletion and site-specific mutagenesis of endogenous and heterologous genes in living plant cells. In this review, we discuss the principles and tools for restriction enzyme-mediated gene targeting in plant cells, as well as their current and prospective use for gene targeting in model and crop plants.